📖 “70% Rule of Excellence” — Reading’s business ROI. Vital Farms’ egg-troversy. Instagram’s Big Tobacco suit. +Pokémon’s AI test

0:28This is Nick. work in finance, but I also wanted to signal that like, I'm going skiing after this. How did it turn out? I think going with three vests at the same time was a bold move and I like bold moves, Jack. Three stories for today's T-Boy. What do we got on the pod? For our first story, it's Vital Farms. The cage-free egg brand is one of the largest egg producers in America, but this stock is down 5 % on a potential scandal or scramble. Let's go with scandal because it's egg yolks are too orange. For our second story, the biggest social media court case in history began yesterday. Yes, it did.

1:04YouTube and Meta are getting sued big time. This is Instagram's big tobacco moment. And our third and final story, the most innovative business ideas in history came from reading one single sentence. Besties, we need to tell you about how being 70th percentile at three things can make you 99th percentile at one thing. I'm very intrigued. Do the math. We'll give you a pause. One second. But yet is before yet that wonderful mix of stories. I mean, what a mix of stories. No one else is doing that mix, Jack. All right. This week, we discovered the wild new way that the tech industry is measuring their artificial intelligence.

1:39Because the ultimate test of AI potential is actually playing Pokemon. Get this. Nintendo's classic Pokemon game is the surprise standardized benchmark test of large language models. That's right, Silicon Valley literally tests how smart their chatbots are by their ability to catch them all. How fast can ChatGPT get that Charizard? How fast can Claude grab a ChatterPie? How fast can Sam Altman steal my Squirtle? Hey, Sam, just get it back, bro. We didn't do this trade. Now, here's the context. Nintendo launched Pokemon in 1996 as a game of complex mazes and puzzles. Well, Jack, it turns out the biggest challenge for an artificial intelligence is...

2:18Complex mazes and puzzles. It's the perfect test. In fact, OpenAI employees have a live stream of their latest model of ChatGPT trying to win Pokemon. How about Google, where their CEO bragged last year that Gemini hit a whole new level in Pokemon? So far, no AI has ever won Pokemon. True story, no one's beat them. So it's funny, like in the 1950s, the Turing test measured computers' ability to imitate with the imitation game. And then, Jack, we measured if a computer could play chess, win Jeopardy, or pass the bar exam. But now we're measuring computers with a different game, Pokemon. And besties, it turns out the only technology more powerful than AI is Bulbasaur.

2:56I'm going to take off one of my vests before the first start. He's drowning. Somebody help out my co-host. Let's hit our three stories. Fifteen years before this song, two boys from the Northeast met in the dorm. They had an idea to cause a cultural storm. It's the best one yet, but the best is the norm. Jack Nick, that's it. I don't even think they need to practice. 50 % that's a fat tip t-boy city on your at list if you know you know because we ready to go we can't wait no more so just start the show start the show first a quick word from our sponsor

3:40so yet he's jack's instituted a new business model for his airbnb hosting and uh jack what is it? Here it is. Host equals guest. Yes. I funnel all my revenue from being a host on Airbnb into one bank account and use that same bank account to book travel for myself. Basically, it's Jack's host guest bank account for when he hosts and when he's a guest somewhere else. When I lived in the city neck, every time my apartment was available on Airbnb, it would get booked like that. I mean, think about how often are you away from home? You got the bridesmaid, you got the shower, you got the bachelorette, you got the wedding.

4:11That's three weekends away just for one wedding right there. Plus, you got to visit your mother. Naturally. Well, that's a lot of potential hosting that you could be doing on Airbnb. Let someone else stay at your place while you're away. Take that host money and spend it when you're a guest somewhere else. Have a business model like me. If you want to travel more, hosting more is a great way to make it happen financially. Your home might be worth more than you think. Find out how much at airbnb.com slash host. Top hats, baseball hats, Von Dutch hats. We wear so many hats on this podcast. Honestly, we're not great at all of them.

4:41No, we've been avoiding hiring someone to wear those hats instead of us, especially the Von Dutch one, because hiring and training can take forever. Well, proud to say that we are hiring right now at T-Boy, and this is a job for Indeed Sponsored Jobs. Because sponsored jobs posted directly on Indeed are 95 % more likely to report a hire than non-sponsored jobs. So besties spend less time searching and more time actually interviewing candidates who check all your boxes, less stress, less time, more results. When you need the right person to cut through the chaos, This is a job for Indeed sponsored jobs.

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5:36For our first story, Vital Farms, the publicly traded co-op of Farmer's Market Eggs, is getting cracked like an omelet on TikTok right now. And if true, the allegations sound bad. They do. But are they true? Hmm, we got curious. Yetis, we got a frittata fiasco here. The only company trying to increase the price of eggs right now, not decrease them, it's Vital Farms. Here's the business. farmers market eggs but scaled nationwide under one brand. We're talking 600 farms providing the supply of eggs to Vital Farms. And Vital Farms provides the one brand to unify them all in grocery stores across the country.

6:11Besties, this business model, it's actually pretty common in agriculture, isn't it, Jack? Welch's grapes, Ocean Spray cranberries, Sunkist, they're all basically co-ops of farms that sit under one brand. But Jack, how would you describe the Vital Farms egg brand, if you will? It makes it sound like the chickens laying the eggs live in some kind of millennial utopia. I'm going to read a line from an earnings report. No, not on the earnings report, on the egg cart. It says happy hens, conscious capitalism, and 108 square feet per hen. I mean, can you sprinkle on some context, please? That's more square footage than a New York City apartment.

6:44You scan the QR code, Jack. You can see the chickens doing arts and crafts, I believe. You want to get on the wait list of that chicken kindergarten. You're not going to believe this hen is a sculptor. Besties, call it the uncaged egg club because this pasture-raised egg company is doing 3 % market share of the egg industry in this country. And it's actually publicly traded. Vital Farms IPO'd in 2020. And the stock was trading at double the IPO price. It was a pure play protein stock. Until a recent controversy fried the stock. Get this. The scramble started on social media, did it not, Jack? A TikTok journalist tossed some huge allegations at Vital Farms.

7:22Basically, this TikToker, who says he's all about helping people find local food, says Vital Farms, eh, they got a little bit too corporate. In a seven-part TikTok takedown, this guy cites a study done last year by Michigan State University that found unusually high fatty acid levels in Vital Farms eggs. And that TikToker says that's because Vital Farms feeds their chickens cheap, quote-unquote, corn and soy subsidized by the U.S. government. He also says that Vital Farms feeds their chickens turmeric, the spice, to make the yolk and the eggs orange instead of yellow. Which is actually, if true, a very strategic marketing move, is it not, Jack?

7:59The orange yolk, if you've ever seen one, it somehow signals wholesomeness and like, wow, this must be a high quality egg. I mean, full disclosure, I'm willing to pay more for an orange yolk, Jack, any day of the week. The orange premium. So that's why they're doing it. But the other reason they're doing it is that you can follow the money to the chicken coop. Vital Farms' biggest institutional investors are profit hungry since that IPO. BlackRock, Vanguard, Amazon, Vital Farms institutional shareholders eat margin for breakfast. Although from studying companies for years, we can tell you that BlackRock and Vanguard are the biggest shareholders at pretty much every publicly traded company.

8:35Now, besties at first, Vital Farms responded with their primal instincts. They left a comment on this TikToker's video calling him a BS influencer. But then Vital Farms took 10 deep breaths and wrote a blog post and FAQ combating the influencers' claims instead. But still, the allegations of greenwashing have had a dent on sales. Now Vital Farm stock is down 46 % from its all-time high because the bad press could poach their Q1 sales. It's 50 shades of orange. So Jack, what's the takeaway for our buddies over at Vital Farm's eggs? Companies face three kinds of police, but only one of them has to prove it in court.

9:14Yetis. The FTC. They're the sheriff of our marketplace. If companies lie in their marketing, their job is to catch them. But it's not just the Federal Trade Commission. There's also Wall Street. Short-selling hedge funds often get ahead of the government in identifying corporate wrongdoing. Those short-sellers put out press releases saying the company is lying, and that's why we're selling the stock so it drops. But now we're seeing a third type of corporate police force, online influencers. You see, Wall Street often sells a stock based on a short-seller's allegation, even if that allegation is totally unproven.

9:44And consumers do the same when we see a takedown of a company on social media. All the time. Conspiracy is the most alluring content on your feed. You want to believe it's true, even if there's no evidence. Only the FTC has to prove allegations in court. But Wall Streeters and online content creators, they don't. Still, we're going to point this out. Many experts, including the authors of this smoking gun study about the eggs, still say that Vital Farms eggs are the highest quality in the grocery store. But that, it's not an interesting headline. So it obviously got way less attention. The reality for corporations, they face three police in the marketplace, but only one of them has to prove it in court.

10:22For our second story, Instagram and YouTube are defending themselves in the biggest court case in social media history. But we've seen this story before with tobacco. This is Instagram's black lung moment. Yetis, big tech, they're kicking off earning seasons this week. Big day on Wall Street for these guys. But everyone's eyes are already on a courthouse in Los Angeles. because a woman known by the initials KGM, a 19-year-old, sued TikTok, Snapchat, Instagram, Facebook, and YouTube. And Jack, KGM's claims on all those companies? While she was a minor, the social media apps compulsively addicted her to her feeds, leading to anxiety, depression, and suicidal thoughts.

11:03And besties with 3 ,000 similar lawsuits in the pipeline, this one sets a huge precedent. Mark Zuckerberg's likely to testify in defense of Meta because the verdict could change social media forever. And here is the key of the allegation, besties. These apps were designed to addict. The infinite scroll, the auto-playing of videos, the push notifications, these are described by experts as dark pattern design. Or to quote Tupac Shakur, I didn't choose the feed life, the feed life chose me. The lawsuit says the company should be held responsible for the harmful impacts of addiction, especially against kids, if they're found to have made those addictive on purpose.

11:43But yet here's what Jack and I find fascinating about this story. History doesn't repeat itself. It rhymes. And Instagram rhymes with cigarettes. This court case is like big tobacco from the 1990s, but substitute Joe Camel for the infinite scroll. Our explanation, we see it as the algorithm is a digital nicotine. You got addicted to cigarettes, you get addicted to swipes. Chemically speaking, the impact of a little Instagram bitch does look like smoking. That's right, it does, Jack, because both nicotine and an algorithm push your brain to release dopamine. Basically, you get a digital hit. And the feel-good sensation of dopamine, that's the driver of the feeling of addiction.

12:23It forces you to grab another cigarette, more cocaine, more gambling, all the addictive things. And it reinforces what doctors call a quote-unquote drug-seeking behavior to get another hit, another hit, and another hit. And we're expecting to see some really embarrassing internal documentation for Meta as this case proceeds. Jack, call a plumber because we already got some leaks. What did we already hear about? Employees referred to their app as a drug and to employees of Instagram as drug pushers. Jack and I went to business school, not law school, but we can tell you that does not sound good.

12:54And that may be why Snap and TikTok settled right at the 11th hour outside of court because they don't want their embarrassing details to get out in the public. But Jack, I gotta ask, what are Instagram and YouTube saying in defense of themselves in this big tobacco-y case? Exactly what you'd expect, Zuckerberg, to say. That mental health is complex and correlation of using Instagram and being depressed is not causation. And they pointed out they build protection tools. They'll shame you if you're still liking pics after two hours on the app. But as anyone knows, unless you have the impulse control of the toddler who passed the marshmallow test, It is really hard to stop using Instagram Unless you throw your phone into the nearest lake I'm sorry, Jack, did you say something?

13:35I was distracted Is it time for the takeaway? Yeah, it is Okay, yeah, yetis, time for the takeaway Jack, what's the takeaway for our buddies in the biggest court cases in social media history? Instagram is having its black lung moment Yetis, in the mid-1990s, 35 % of high schoolers smoked cigarettes Today, it's under 10 % Because the big court cases of the 90s against big tobacco framed cigarettes as a public health issue affecting our minors. So the key to this case isn't that kids use too much social media. It's that the engineers designed them to addict just like the cigarette companies did.

14:13Intentional design plus awareness of harm plus a profit motive equals legal liability. That's the equation. For tobacco, regulations led to age gating and wild warnings like pictures of black lungs on cigarette gardens. This case could have a similar impact to warn people about the harms of social media or even make illegal addictive design elements like the endless scroll. Because the breakthrough for both of these phenomena is reframing the issue as a public health crisis. Apparently Zuckerberg's the Marlboro Man because this could be Instagram's black lung moment. Now a quick word from our sponsor.

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16:00Oh, could this vintage store be any cuter? Right? And the best part? They accept Discover. Accept Discover? In a little place like this? I don't think so, Jennifer. Oh, yeah, huh. Discover's accepted where I like to shop. Come on, baby, get with the times. Right, so we shouldn't get the parachute pants? These are making a comeback. I think. Discover is accepted at 99 % of places that take credit cards nationwide. Based on the February 2025 Nielsen Report.

16:33For our third and final story, reading is the secret superpower of business success. And we found five great businesses that were born from one thing, read by one person. And being 70th percentile in three things will make you incredibly successful in one thing. That's the 70-70-70 % rule. We'll get to it. But first, besties, one out of four of you have not read a single book in the last year. We've got the details. We've got the stats. We're not narcing on you to your English teacher right now. No, we're not judging. But wait till you're the end of the story. Because we've told you before the wild stat about Warren Buffett.

17:11He claims to read 500 pages a day. And not just novels and biographies, by the way. Warren Buffett's 500 pages a day include newspapers, reports, work stuff, all that good stuff. Before this man punches out, the world's best investor read a Moby Dick worth of text every day. So the reason, besties, Warren Buffett's Berkshire Hathaway stock is up 6 million percent in 60 years, and yes, that's a real number? It's that reading is like compound interest for your brain. But besties. The real ROI on binge reading. It's not about everything you read. It's about one thing you read. Because Warren Buffett actually read Barron's Magazine for 50 years.

17:48It's a magazine about investing. But he only found one investing opportunity that he acted on. But here's the key. That one idea led to an investment that made a$400 to$500 million profit. So as Warren said, I have made a$400 to$500 million profit from reading Barron's for 50 years and following just one idea. It's a single line win. Basically, a single needle in a haystack of reading was a breakthrough for Warren Buffett worth half a billion bucks. And it turns out many of the greatest innovations in business started because a founder read one line that he or she couldn't stop thinking about.

18:26And Jack and I read about this concept in the newsletter by Trung Fan, which we happen to be fans of. So like, for example, Jack, tell us about Trader Joe's. Joe Colom read a statistic in Scientific American magazine about the rise in college degrees, so he created a grocery store for the quote-unquote overeducated, underpaid. Jeff Bezos read in a magazine that the internet was growing at 2 ,300 % per year, so he quit his job and started something called Amazon. Why did Sarah Blakely name her shapewear business Spanx? Well, she read in a book that consumers like the sound of K, like Coca-Cola, Kodak, or Spanx.

19:02Phil Knight was lying around reading a newspaper about Japanese trading companies being flushed with cash in the 1960s, so he reached out to one of them and funded his struggling startup, Nike. And what led to Bill Gates' passion for the personal computer? Well, he read a line in Popular Mechanics that stopped him in his tracks. And those are his words. And you know what, besties? Jack and I have the same approach to storytelling. That's how we build every story of this podcast. right, Jack? We'll read a whole earnings report or an entire article and turn one line that we couldn't stop thinking about into the entire story.

19:35So Jack, what's the takeaway for our buddies over in business? Reading is how you unlock the 70, 70, 70 % rule of success. Look, Yetis, reading won't make you the greatest expert in one topic, but it will make you knowledgeable. Reading a book on, say, the hotel industry, it's not going to put you in the 99th percentile of hotels, but it will put you in the 70th percentile. And Trung's insight from this is that it's better to be 70th percentile at many things than 99th percentile at one thing. To know more than 70 % of people about one thing doesn't take that much time. You could do it just by reading one book.

20:12But knowing more than 99 % of people, that's going to require years of study. And if you stack up the skills in which you're at 70th percentile, then together, that is powerful. For instance, the best comic book illustrator of all time. He was 70th percentile at humor, 70th percentile at writing, 70th percentile at drawing. And the overlap of three 70th percentiles makes you a 99 percenter, but in a fraction of the time. It's like the saying, Jack of all trades, master of none, but often better than a master of one. That's the full quote. Besties reading, it gets us to 70 % expertise fast. And 70 % in three skills, that is a talent stack.

20:52Jack, could you whip up the takeaways for us for Saviche Wednesday? Vital Farm Stock is getting yoked on allegations made by a TikToker. There are three kinds of corporate police yetis, but only one of them has to prove it in court. For our second story, Meta and YouTube are in what could be a landmark court case that will likely take months to finish. It's about digital nicotine. The jury, it could hand Instagram its first black lung moment. And our third and final story is that the best business minds read a lot. The ROI on binge reading. Because one big idea can come from just one thing that you read.

21:24And 70 % in three different skills is one heck of a talent stack. But besties, this pod's not over yet. Here's what else you need to know today. First, India announced the mother of all trade deals with the European Union. It's the number two and number four largest economies in the world that includes two billion people. Basically, one out of four of us. By our math, that is the biggest trade deal in human history. And it's a sign of increased cooperation abroad, while the U.S. hasn't secured trade deals with either of those two. And second, speaking of abroad, Jack, one American movie made more money in China than all others combined last year.

22:02And who was it? Zootopia 2. Yep, Disney's Zootopia sequel hit$1.7 billion at the global box office. Highest animated movie take home ever, thanks to China. Now, China has, like, stopped watching American movies. But Zootopia 2 is the exception. And there's a cultural reason that explains it. This is interesting. You see, the Chinese empathize with the main character in Zootopia, the bunny, who goes from living in the country to making it in the big city. That's the dream of like a billion Chinese people. And the antagonist in Zootopia is a snake. And last year happened to be the year of the snake.

22:35So Disney, don't bank on Zootopia 3 being a success. Unless there's a rat as the antagonist. And finally, yesterday we did a story on Graza, the$150 million olive oil brand that put olive oil in a shampoo bottle. Well, Heinz Ketchup just said, hold my beer. They launched the first ever keg of ketchup. That's right. Heinz created a keg of ketchup, a.k.a. the Keg Sup. It's a Super Bowl marketing move one and a half weeks before the bowl. It's also part of a broader trend in food and beverages. To win the wars on the shelves, it's all about the package. Time for the best fact yet. This one whipped up by Jack and I because we got a cool update for you.

23:14Well, the Winter Olympics began in just 10 days and Team USA just announced the final roster. So we dove in T-boy style and we got some takeaways. Jack, youngest Team USA athlete, who is it? Abby Winterberger, free skiing, 15 years old. Oldest athlete, who we got? Rich Rahonen, the curler, is 54 and still on Team USA. Team USA also features four sets of siblings on the squad. Including the kachucks of Team USA isaki. But Jack, the state with the most per cap of representation, who is it? Vermont. Only three, but that's pretty good for a population of only seven. It's like half the state and Jack knows all three of them.

23:53Oh, but the school with the most representation on Team USA overall, who is it? University of Minnesota. Opening ceremonies next Friday, February 6th. If you know, you know. By the way, for seven Americans, this is their fifth Olympics, including 41-year-old Lindsey Vonn. Yetis, you look fantastic for Ceviche Wednesday. Jack, I lost you under the vest. You okay? Dude, I'm drowning. I'm drowning in my vests. All right. Besties, go enjoy Whipin' Open a few chapters of Great Expectations tonight, and you'll probably come home with a profit tomorrow. I think that's the day. And then share that story with someone who you love today.

24:31H-Y-H-T-V-O-Y, Nick and I. We'll see you tomorrow.

24:39And before we go, happy birthday to legendary Yeti Sam Jensen celebrating all the way over in Utah. Happy 21st birthday to Ivan Jimenez in the University of Massachusetts in Amherst. I think he's got one of those Heinz ketchup kegs, Jack. And Gabby Pena has turned 18 years old down in Orlando. Happy birthday. Happy birthday to Valerie in Rockford, Michigan. And Trendwiz goes, turning big, 50 years old in Greenbush, Minnesota. Happy birthday to Jake Jordan, celebrating in his garage in Atlanta. And David Solpe, happy birthday, even though still nobody knows where you're from. And to anyone else celebrating something today, make it a T-boy.

25:14Celebrate the wins. This is Jack. I own stock of Amazon, Berkshire Hathaway and Disney, and Nick owns stock of Lululemon. A password manager should be the first security purchase you make for your team. Why? Because compromised passwords are the number one way bad actors attack companies, and small businesses are their favorite targets. But unlike a lot of security challenges, passwords actually have a pretty simple solution. 1Password lets you manage all your business's credentials, so you can feel confident that your data stays secure as your company grows. Find out more at 1password.com slash special offer and start securing every login.